“There’s a lot of talk about an AI bubble,” CEO Jensen Huang said during the AI arms dealer’s third-quarter earnings call. “From our point of view, we see something completely different.”
Huang marked the occasion by noting, in a statementthat “Blackwell’s sales are off the charts and cloud GPUs are selling out.”
Recently high-profile sales of Nvidia shares by Peter Thiel’s hedge fund and by Softbank raised concerns among investors about the GPU maker and the health of the AI boom. The company reported revenues of $57 billion, up 22 percent from the previous quarter and an astonishing 62 percent from the same quarter last year.
It maintained this growth with a GAAP gross margin of 73.4 percent. That kind of margin is rarely seen outside of monopolies like Microsoft’s Windows, before the mobile boom changed the addressable market for operating systems, and Google’s search business in more recent years.
Nvidia’s continued growth suggests that doubters have abandoned ship prematurely. And it now appears that the tech-dependent US economy still has some upside potential.
One of the concerns regarding Nvidia has more to do with its customers than the company itself. Well-known investor Michael Burry did that argued that companies like Oracle and Meta underestimate the depreciation of their Nvidia GPUs, an accounting practice that distorts the market value of these companies.
Treating Nvidia GPUs as if they will remain commercially useful for more than two or three years reduces annual costs, increases paper profits, and generally makes financial statements look better.
Nvidia’s product cycle is faster than that: in 2023, the company said an investor presentation [PDF] that it would shift “from a two-year rhythm to a one-year rhythm.” So it seems difficult to justify long depreciation schedules for the Nvidia kit.
The lion’s share of Nvidia’s revenue came from the company’s data center business, which totaled $51.2 billion, up 25 percent from the second quarter and 66 percent from a year ago.
Huang argued that demand will continue to grow as generative AI shifts the work that hyperscalers used to do on CPUs to GPUs.
There were some small specks of doubt in the earnings report, especially around the circular deals that are arguably helping to support the AI boom. While Nvidia in September celebrated its intention to invest “up to $100 billion in OpenAI” as part of a data center partnership, the risk in the form of the GPU maker 10-Q filing [PDF] makes that deal less certain.
“In the third quarter of fiscal year 2026, we entered into a letter of intent with the opportunity to invest in OpenAI,” the filing said. “In November 2025, we entered into an agreement, subject to certain closing conditions, to invest up to $10 billion in Anthropic. There can be no assurance that we will enter into definitive agreements regarding the OpenAI opportunity or other potential investments, or that any investment will be completed on the expected terms, or at all.” ®
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